Digital Marketing Spend to Surpass $118 Billion by 2021

By Digital Marketing

Forrester has been studying digital marketing for roughly twenty years, and its latest report has revealed a major, long term shift in marketing toward the digital world as well as changes in the types of digital marketing being utilised by companies.



Current Trends in Digital Marketing Spending

Digital marketing spending has been growing at about 11% a year for more than a decade. The spending is divided between search marketing, online video, email marketing and display advertising. Online video is the fastest growing segment of digital marketing.

Online video has the benefit of being highly targetable, the ability of creating a personal connection with the viewer and possible even for those with a small budget. Spending on online video has been increasing by more than 100% a year since 2014. One of the reasons online video is expanding this fast is that companies that already have commercials on TV are placing them online to try to reach millennials who are turning off the TV in favour of on-demand media. It is also to reinforce their message with customers online who may or may not have seen their commercials. The overall appeal of video marketing is why TV advertising is expected to be cut to pay for online marketing videos.

The Future of Digital Marketing

Digital marketing is expected to approach 120 billion dollars by 2021. Digital marketing is projected to become almost half of all advertising at that time. Much of this is due to millennials, a generation of digital natives, moving into the high spending life stage and marketers going digital to connect with them.

Forrester expects that search engines emphasising quality over quantity and customer demands for personalised attention will push out long tail publishing. These trends will increase the value of influencer marketing and long term business relationships. There will be less volume-based advertising campaigns and more content focused on emphasising brand experiences. Think about Coke’s ads with teenagers having a fun time at the amusement park while constantly sipping on Coke bottles or Apple’s branding as the technology that smart, hip people own regardless of the actual device they are using at the moment.

Paid search will remain the main investment of digital advertising budgets, but Google ads are not growing as fast as digital marketing as a whole. Google ads are expected to grow 8% a year compared to 11% for the overall digital marketing budget. Google is competing with marketing through other search engines, social media marketing and ads within sites like Amazon.

Other Changes Forthcoming in Marketing

More effort is being made on improving the sales funnel, since this can dramatically increase the conversion of potential customers into repeat buyers. For example, altering one’s shopping cart process to reduce abandonment rates and improving product directories so customers find exactly what they want are growing in importance.

Forrester expects to see much more spending on in-store experiences so that new customers feel inducted into an exclusive club of product owners and ensuring that no one is alienated by a poor experience. This is leading to better training of sales agents to answer questions by customers and content available for customers searching for comparisons between models and competing products while standing in the aisle.


Online marketing is the future of advertising because that is what millennials and later generations are predominantly using. Digital marketing is shifting from high volume search engine marketing to video marketing, though content marketing and social media marketing are growing as well. Online marketing is evolving to feature brand awareness and emotional imprinting while offline marketing efforts increasingly focus on in-store experiences and customer care to create long term relationships with their clients.

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